A mining and exploration retrospect for December 22, 2012, to January 4, 2013

To accommodate the Christmas/New Year publishing schedule, this review covers two weeks.

From risk to risk

“Although some companies and the province laud Ontario as being one of the best mining-friendly jurisdictions in the world,” that reputation is changing, according to a Thunder Bay-based drilling contractor. In the January 2 edition of Northern Ontario Business, Barb Courte, president of Cobra Drilling and North Star Drilling, said the province is facing a downturn in early-stage exploration.

The article stated, “In conversation with her industry colleagues, Ontario is considered a ‘risk area’ for investment, based on some high-profile First Nations-industry conflicts, along with the uncertainty of how the new Mining Act plans and permits regulations will play out.”

Courte told Northern Ontario Business her companies did well in 2012 but business has now dropped by about 50%.

A supplier dates the drilling downturn to last April. Hugh Paxton, GM of Wire Rope Industries Distribution, told the paper, “It’s the lowest numbers we’ve seen for drilling supplies since we’ve been [in] it for the last four years.”

Courte, meanwhile, hopes to make up for lost business in the Caribbean. Unigold TSXV:UGD has contracted her to send four drills to the Dominican Republic in autumn and she’s getting inquiries from other companies operating in the country, the story stated.

Unigold calls the country a “premier mining destination.” The company’s most recent (November 28) news release stated the government “supports development and exploration in the mining sector. In addition, the country has well-established mining laws and environmental laws.”

Two days later, however, Mining Weekly offered a different perspective. A spokesperson for the Xstrata Nickel subsidiary Falcondo told the publication, “Security in the country has seen a gradual deterioration, which has forced us to significantly increase our security costs. They have tripled in the past few years.”

Mining Weekly added, “Dominican President Danilo Medina has acknowledged the problems and promised in a televised speech to the nation on [November 27] to improve security and reform the country’s police force. According to the World Economic Forum’s latest Global Competitiveness Index released in October, the Dominican Republic ranked 143rd out of 144 countries worldwide in reliability of its police force.”

New mega-company consolidating China’s rare earths production

A planned 12-company takeover could mark the first step in creating “a massive rare earth enterprise that will integrate light rare earth resources” in northern China. According to a December 28 China Daily article, newly signed framework agreements would have the companies and their shareholders hand over a combined 51% interest for free to the Inner Mongolia Baotou Steel Rare-Earth Hi-Tech Co (REHT). In return, REHT would provide management, technology and funding, while setting production and export quotas. The agreement allows one year for the deals to be consummated.

“If the first step goes well, REHT will eventually team up with major rare earth producers in Gansu, Sichuan and Shandong provinces to form the China North Rare Earth Hi-Tech Co,” China Daily reported. “Authorities expect bigger enterprises to churn out products with higher added value and shoulder more responsibility in environmental protection.”

With just 23% of the world’s rare earths reserves, China supplies over 90% of global demand, the paper added.

Can placer miners meet B.C.’s environmental code?

An enduring legacy of the Fraser and Cariboo gold rushes, placer mining remains a British Columbian institution. But now that a forgotten 2011 environmental report has come to light, the miners are worried.

An audit from B.C.’s Ministry of the Environment found 74% of 23 placer operations inspected in 2010 didn’t comply with land restoration requirements and 43% of miners “were also working in streams without authorization,” the Vancouver Sun reported on December 26.

“The placer mines range from one-person operations to larger operations that employ dozens of people and use heavy equipment to extract gold from sand and gravel,” said the story.